Diageo versus Anheuser-Busch
The biggest liquor company of them all is taking on the beer oligopoly. It's all about that company's "marketing muscle and political clout," as Diageo now controls 27% of US liquor sales, according to a story in the Wall Street Journal ("In Its Long War with Brewers, Liquor Industry Gets Aggressive", 5/24/2004), For many years beer has gotten a better deal than hard liquor in terms of taxes, distributions, and access to advertising.
Diageo has a growing lobby presence, and an effective one. It has managed to persuade nine states to allow liquor sales on Sunday. It's built up its industry group, Distilled Spirits Council of the United States. It's helped defeat tax increases on liquor in 26 states. It's expanded its advertising presence on cable TV and on local stations. (Liquor ads are still banned on network TV.)
The result is that liquor sales are up as beer sales are slightly down. One new source of revenue is brewed, liquor-based products like Smirnoff Ice, so-called "malternatives" and "alcopops." This new class of products should be advertised and distributed like beer.
This threatened to alter the comfortable competition matrix in which Anheuser-Busch was dominant, and they fought back by persuading government agencies to change the rules on malternatives and by using advertising force to keep the ads off the major networks. The battle rages on.
US Liquor market share
| Company |
Percent of US market |
| Diageo |
21% |
| Allied Domecq |
10% |
| Bacardi |
8% |
| Brown Forman |
8% |
| Schieffelin & Somerset* |
8% |
| Jim Beam |
7% |
| Constellation Brands |
5% |
| Pernod Ricard |
5% |
*Partly owned by Diageo
8:28:09 PM 
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